A phrase does not have to be on record as a well-known "slur" in order to qualify as one. Yes, technically, Will is gay and he is a boy, hence, he is a gay boy, but Nick is clearly stating this in a disparaging manner. We know this based not only on his tone, but also on his own admission that he believes that being gay is wrong. He's not stating a fact, he's being derogatory and contemptuous.

I'm not sure why they didn't just stick with the more obvious slur "fairy", which T has used on at least one occasion, if they were unwilling to use "faggot", but in any case, when Nick says "gay boy", it definitely qualifies as a gay slur.

I think Nick is using prison slang when he uses the term "gay boy".In prison it is proabably a derogatory term that applies to weaker prisoners who are used for sexual purposes by more dominant prisoners.

I would think prisoners could come up with something better than gay boy.

They probably can and have done so but this is still daytime TV where the other "F" word is not often used.